The correlation between Ethereum and Litecoin could be bullish for either
The digital asset market has generally rallied for the past 72 hours. Bitcoin has shown strong signs of recovery and altcoins are also doing well. While Ethereum is seen by many as the main force behind any alternative rally, putting Litecoin in the same bracket sounds strange. However, there are important signs that both ETH and LTC are now building strong foundations to drive the upward momentum.
Ethereum: now the whale game?
According to Santiment, the Ethereum whale addresses are approaching a new all-time high in terms of supply held. The top 10 addresses held 19.25 million ETH 3 weeks before the $ 4,375 price tag. At the time of writing, the offer is held at 19.08 million, proof of how strong ETH holders did not give in to selling pressures during the correction.
In addition, active addresses also seem to have higher engagement, with deposits falling on the leaderboard. From late April to May 15, ETH deposits were at a significant high, but they are currently hitting lows last seen in late February. It should be noted that the ETH deposits were even lower in March and early April.
In the end, Ethereum’s 365-day MVRV didn’t fall into negative territory, a result that shows long-term owners can still make a lot of profit.
From a derived point of view is Institutional newsletter from Deribit in May 2021 showed that the volume of Ethereum options continues to generate more interest from traders. According to the data,
“In May 2021, 581,578 BTC options contracts were traded, 0.8% fewer than in April 2021.
4,891,831 ETH options contracts were traded in May 2021, an increase of 43% compared to April 2021. “
How does Litecoin fit into this bullish narrative?
Now Litecoin has been more of a pioneer than a leader in the market in every bull cycle. However, recent market sentiment points to the divergence.
According to sentifi.com, Litecoin recorded the highest sentiment score of all crypto assets in the last week of May 2021. NEO followed, with the list including other popular assets like Binance Coin and Dogecoin. While these factors allow the market trend to change slightly, trading activity is still required for the price to move up on the chart.
In terms of trading volume, Litecoin currently leads most of the altcoins. LTC had a 24-hour trading volume of $ 4.46 billion at press time. This number is only lower than that of Bitcoin, Ethereum, Binance Coin, and Dogecoin.
Although LTC is still outside the top 10, it is still seeing more activity than Cardano, Polkadot, XRP, Chainlink, etc.
Basically, Litecoin’s bullish rally will receive strong bullish confirmation if the price closes above the $ 209 resistance. The range between $ 206 and $ 225 is an important area above which LTC will jump right up to $ 300 to $ 350.
Is there a connection between the two altcoins?
That’s right. While the Ethereum and Litecoin markets have been correlated over the past few months, this could represent stronger upside sentiment if both assets continue to see appreciation and trading volume. It also allows other altcoins to trade at higher levels, especially since ETH pairs received a significant amount of traffic during the bull cycles.
According to Ambcrypto